What is a power of attorney?
A power of attorney is a legal document whereby you give a trusted person or persons (the attorney or attorneys) the authority to manage your affairs if you are not able to look after matters on your own. A power of attorney is therefore different from a will in that it is used to protect your wishes while you are alive; a will is used to protect your wishes after you’ve died.
What types of power of attorney are there?
There are 2 types of power of attorney:
1. Continuing Power of Attorney for Property:
This type of power of attorney deals with financial matters and allows another person to manage your finances, including your property and bank accounts. This means that your bills can be paid and gives peace of mind for all concerned. Your attorney for property will be given wide powers to deal with all aspects of your financial affairs, including access to your bank accounts, dealing with investments, making tax returns, claiming and dealing with benefits, settling any liabilities, even selling your property on your behalf.
This power of attorney can be used when you lack the capacity to make your own financial decisions. However, it may also be used where you still have capacity but due to illness or infirmity, you need help looking after your affairs.
2. Power of Attorney for Personal Care
This second type of power of attorney allows the attorney to make decisions relating to your medical care, where you should live, social activities and also decisions on life-saving treatment. A personal care power of attorney will not come into force until you lack the capacity to make your own decisions about your care, treatment and welfare.
Who should you appoint?
You should appoint a trusted family member or friend who has a genuine concern for your well-being. You can choose to appoint the same individual(s) or a combination of individual(s) as your property and personal care attorneys.
Another option for your power of attorney for property is to use a trust company to act as your attorney.
What happens if you don’t have powers of attorney?
If something happens to you and you no longer have capacity to appoint attorneys, other arrangements will have to be made.
Without a power of attorney for property, your family will not be able to get access to, or deal with, your assets. For example, unless your bank accounts are in joint names with your spouse, the bank may freeze your accounts and not let anyone, including your spouse and children, access them until an alternative form of authority is provided.
Without a power of attorney for property, the Public Guardian and Trustee will become your statutory guardian. There is a process in the Substitute Decisions Act that allows an incapable person’s spouse, partner, or other relative to apply to take over statutory guardianship from the Public Guardian and Trustee. This is a very long and expensive process. Moreover, the family member applying may not be the same person that you would have chosen. It’s a lot easier to already have a power of attorney for property in place.
The rules and procedures that apply to substitute decision-making for personal care are different from those that apply to property. The Health Care Consent Act describes a hierarchy of who may act as the substitute decision-maker if you are deemed incapable: first, your spouse or partner, then your parent, then your brother or sister and lastly, any other relative. Again, the family member entitled to act pursuant to this hierarchy may not be the person you would have chosen. You can avoid this issue by already having a power of attorney for personal care in place.
By signing a power of attorney, you are ensuring that if anything ever does happen to you in the future, those you love and trust have the power to look after you in the way that you would want.